Florida Homestead: How Does It Apply in Foreclosures

What is Florida’s homestead protection? The answer is not as straightforward as it might seem. Put simply, Florida’s state constitution provides homestead owner’s protection from forced sale of their home by many creditors. For example, in probably one of the most famous instances of Florida’s homestead provision in action, the now infamous past football OJ Simpson used Florida’s homestead protection to shield his home from forced sale by creditors. This example demonstrates one very important aspect of the Florida Constitution’s Homestead provision; it applies to all Floridian’s that qualify for it and does not contain a monetary cap on the amount of protection it provides. Thus, the next logical question is, “how do I qualify for homestead protection?”

How do I Qualify for Florida’s Homestead Protection?

Article X § 4 of the Florida State Constitution (“Constitution”) outlines both the effect of Florida’s homestead protection and how to qualify for it.

The plain language of the provision imposes four requirements that must be satisfied in order for a person to qualify for the Constitution’s homestead protection:

1. the property must be owned by a natural person, i.e. an actual human being not a business,
2. the person claiming the exemption must be the owner of the property,
3. the person claiming the exemption must be a Florida resident who establishes that he or she made, or intended to make, the homestead property his or her permanent residence, and
4. the property must meet the constitution’s size and contiguity requirements. 

Generally, the question of a person’s residency is a question of fact that’s determined by courts on a case-by-case basis based on the circumstances of the case, and which property constitutes a person’s residence  is typically contingent upon the intent of the property owner. However, as a general rule, the Constitution’s homestead provisions are to be liberally construed in favor of homestead protection. Havoco Of America, Ltd. v. Hill, 790 So. 2d. 1018, 1020 (Fla. 2001). This means that if the determination of whether or not a homeowner qualifies for homestead protection is a “close call,” a court will rule in favor of affording the homeowner homestead protection. 

With respect to the size of a protected parcel, the homestead provisions of the Constitution will protect up to 160 acres, if the land is located in an unincorporated (i.e. non-city or non-municipal) area, or one-half acre if the land is located in an incorporated (i.e. a city or municipality) area. In both instances, the contiguity requirement requires that the land be undivided, i.e. one single piece of land without division by things like public roads. Once these requirements are satisfied, the Constitution’s homestead protections against forced sale of homestead property attach automatically as a matter of law without you having to file a special registration or complete waiting period. 

Moreover, you should keep in mind that even if your homestead property may be larger than the plot-sizes (160 acres or 1/2 acre depending on where the property is located) protected by the Constitution, part of your homestead property will still be entitled to protection. Thus, if your home sits on one acre of land in the city, half of that land is a protected homestead, normally the half where your actual home is located.  

Exceptions to the Constitution’s Forced Sale Protection

If the requirements set out above are satisfied, the homestead property is shielded from forced sale, i.e. foreclosure, by most creditors unless the creditors are “super creditors.”

Super Creditors

Super creditors under the Constitution are defined as follows:

1. governmental entities seeking forced sale to satisfy unpaid taxes or assessments,
2. mortgage lenders, and
3. tradesmen who repaired or improved the property.

Thus, any creditor other than a super creditor will be barred from seeking a forced sale of your home once you satisfy the homestead requirements, and this will occur automatically without any further action on your part.

However, keep in mind that “mortgagors” are super creditors, and thus, can foreclose on your home, but judgment creditors from things like credit cards, personal injury claims, etc. cannot foreclose on your home.  

What Happens if I Sell My Home?

A voluntary seller of a homestead property is entitled to protect all of the proceeds from their sale if they intend to reinvest the proceeds into a new homestead property within a reasonable amount of time.

The following requirements must be met for sale proceeds of a homestead to maintain the same protection from creditors as the original homestead:

1) there must be a good faith intention, prior to and at the time of the sale, to reinvest the proceeds in another homestead within a reasonable time,
2) the funds must not be commingled with other monies, and
3) the proceeds must be kept separate and apart and held for the sole purpose of acquiring another home.
JBK Associates, Inc. v. Sill Bros., 191 So.3d 879, 881 (Fla. 2016).

Once these requirements are satisfied, the proceeds from the sale of your home will be shielded from creditors in the same manner as your homestead property. Id. at 881-82.

However, any proceeds from the original sale that are not reinvested in the new purchase become “surplus” funds that will be exposed to creditors. Id. at 881.

Florida Foreclosure Defense Attorney in Spring Hill, FL

At the Peck Law Firm, P.A., our foreclosure defense attorney is dedicated to assisting individuals and families facing foreclosure to determine their best legal course of action because he understands how difficult the foreclosure process can be. Our foreclosure defense attorney has been serving the Spring Hill community for years and is ready to start working on your case immediately. So, if you or a family member is being threatened with foreclosure, contact the foreclosure defense attorney at the Peck Law Firm, P.A. in S[ring Hill now to find out how are attorney can help you!